Sally Beauty sales fall on supply chain, inflation headwinds

By

Benjamin Fitzgerald

Published
May 6, 2022

Sally Beauty Holdings said on Thursday second quarter sales declined for the three months ending March 31, hindered by supply chain and inflation, affecting sales in the firm's largest segment Sally Beauty Supply.

The Denton, Texas-based company said second quarter net sales were $911.4 million, a decrease of 1.6% compared to the prior year, with a comparable sales increase of 0.2%. Global e-commerce sales were $81 million or 8.9% of net sales for the quarter.

By segment, Sally Beauty Supply ​sales were $525.8 million in the quarter, a decrease of 3.1% compared to the prior year, while the Beauty Systems Group segment clocked $385.6 million in the quarter, an increase of 0.5%. The group's two business divisions operated 126 and 16 fewer stores, respectively, during the quarter, compared the same quarter last year, the company added.

“After a strong start to the year, we experienced greater than expected pressure on the top line as supply chain and inflationary challenges intensified in the back half of the quarter and we lapped the stimulus benefits of 2021,” said Denise Paulonis, president and chief executive officer. 

“While these factors impacted net sales, we delivered healthy gross margins above 51% and adjusted earnings per share of $0.47."

The company's earnings in the second quarter rose to $46.8 million, or $0.42 per diluted share, compared to net earnings of $38.3 million, or $0.34 per diluted share in the prior year.

"As we navigate the ongoing macro environment, we remain confident in the underlying strength of our business and the resiliency of our core color and care customers," added Paulonis.

Founded in 1964, Sally Beauty Holdings operates both ​Sally Beauty Supply and Beauty Systems Group.

Sally Beauty Supply stores offer up to 7,000 products for hair color, hair care, nails, and skin care through proprietary brands such as Ion, Generic Value Products, Beyond the Zone and Silk Elements as well as professional lines such as Wella, Clairol, OPI, Conair and L’Oreal.

Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall stores, along with its outside sales consultants, sell up to 10,000 professionally branded products including Paul Mitchell Wella, Matrix, Schwarzkopf, Kenra, Goldwell, Joico and Olaplex, intended for use in salons and for resale by salons to retail consumers.